The U.S. Bureau of Citizenship and Immigration Services said March 20 it would begin accepting H-1B visa applications April 1 as usual, but with terms and conditions imposed due to the recently approved Employ American Workers Act. The changes are not likely to affect the Silicon Valley but will severely restrict banks and other financial institutions that heavily rely on the H-1B program.
The new law prevents a company from displacing U.S. workers when hiring H-1B specialty occupation workers if the company received stimulus funds from Congress. The law took effect Feb. 17 and applies to any hire taking place before Feb. 17, 2011.
A favorite of American technology companies, the H-1B program is a temporary work visa program allowing American companies and universities to employ foreign guest workers who have the equivalent of a U.S. bachelor's degree in a job category that is considered by the USCIS to be a "specialty occupation." The idea is to allow companies to hire foreign guest workers on a temporary basis when a sufficient qualified American work force can't be found to meet those needs.
This year's quota for H-1B visas is 65,000, of which the technology industry annually applies for about half. However, the first 20,000 H-1B petitions filed on behalf of aliens who have earned a master's degree or higher are exempt from this cap. Also exempt from the H-1B cap are foreign workers who will work in higher education or affiliated nonprofit entities or at nonprofit research organizations or governmental research facilities.
All of which adds up to business as usual for technology companies, despite recent scandals in the H-1B program and criticism from some members of Congress who contend that American workers are hurt by the program. In fact, with the H-1B visa restrictions imposed on the financial industry, things look bright for tech companies looking to fill their ranks with H-1B visa employees.
"It's very good for tech companies if the numbers are lower [from the financial industry]," said Eleanor Pelta, an immigration partner with Morgan, Lewis and Bockius. "Last year, there were 133,000 applications [for the 65,000 quota]. This year, chances are likely to be better for tech companies."
The situation is also likely to prompt lawmakers to reintroduce H-1B visa reform legislation from the 2007-2008 110th Congress. Sens. Charles Grassley, R-Iowa, Dick Durbin, D-Ill., and Bernie Sanders, I-Vt., pushed for legislation increasing the fees on H-1B visas while not raising the 65,000 visa cap. The Durbin-Grassley bill would have required employers to make a good-faith effort to hire American workers first, and employers would also have to show that the H-1B worker would not displace an American worker.
"We need to stop worrying about the numbers and let the market decide," Pelta said. "The market should be dictated by employer needs."
But fraudulent H-1B visas are likely to be a hot topic in Congress when it takes up visa reform. In February, federal authorities busted an alleged nationwide H-1B scam ring, arresting 11 people in seven states and bringing a 10-count indictment against a New Jersey IT services company. The indictment charges Vision Systems Group with one count of conspiracy and eight counts of mail fraud and seeks $7.4 million in forfeitures.
According to the Department of Justice, the scheme involved hiring college-educated foreign workers to allegedly fill high-tech jobs in Iowa when, in fact, the workers were sent to the East and West coasts while being paid the lower prevailing Iowa wage rate.
"There will always be bad actors," Pelta contended. "There is no doubt some members of Congress will be exercised [over the issue] and these claims need to be looked at very closely, but ultimately it is an enforcement issue for the Department of Labor. The enforcement tools are already there."
All of the H-1B visa reform bills ultimately failed in the 110 Congress, as lawmakers did not want to split off H-1B reform from a larger immigration bill that was loaded with such explosive political hot buttons such as border security and amnesty. That bill, too, failed to win passage. Grassley is expected to introduce H-1B reform legislation similar to his 2007 efforts by the spring of 2009.